#NYFrackingScandal Hits Cuomo Administration: Newly Disclosed Documents Show Conflicts of Interest

Photo from NYPost.com

With only two days before the expected release of New York’s Environmental Impact Assessment on fracking (also known by the industry term hydraulic fracturing), Governor Andrew Cuomo’s administration is at the center of a new conflict of interest scandal regarding two of his top aides.  Today, seven groups requested the Albany County District Attorney General David Soares investigate the Cuomo Administration’s conflicts of interest surrounding two staffers that hold “key positions in New York’s decision over whether to allow high-volume hydraulic fracturing.”

There are looming questions on the impartiality of Lawrence Schwartz and Robert Hallman, two top Cuomo Administration officials, who have significant influence on the Governor’s fracking decision. New documents obtained by DeSmogBlog through New York’s Freedom of Information Law (FOIL) show that Mr. Schwartz has significant stock holdings in companies that stand to benefit from fracking in New York state, and that Mr. Hallman failed to make specific financial disclosures, raising questions about his objectivity on the issue.

The two top aides, Lawrence Schwartz, Secretary to Governor Andrew M. Cuomo, and Robert Hallman, Deputy Secretary for Energy and Environment, have significant oversight within the Cuomo Administration on the issue of hydraulic fracturing. According to the groups’ letter, Mr. Schwartz supervises all state deputies and commissioners, including Mr. Hallman and the Commissioner of the New York State Department of Environmental Conservation – the agency that is tasked with studying high-volume hydraulic fracturing and developing the state’s policy regarding this extraction technique. Mr. Hallman is the state’s highest gubernatorial staff member who has oversight over the state Department of Environmental Conservation.

According to financial disclosure documents, Schwartz has substantial holdings in companies engaged in shale gas development, including ConocoPhillips, Occidental Petroleum and ExxonMobil. ExxonMobil alone holds 43,000 acres of leases for fracking in New York under its subsidiary XTO Energy Inc. Schwartz also identified “Williams Co.,” apparently a reference to “The Williams Companies Inc.,” a pipeline company that plans to build a $750 million pipeline through the southern portion of New York.

Mr. Hallman failed to specify his stock holdings in his financial disclosure forms, which seems to violate (at the very least) the spirit of N.Y. Pub. Off. § 73-a. The law states that “Public officials are required to list “EACH SOURCE” of income greater than $1,000 and “the type and market value of securities… from each issuing entity” greater than $1,000,” according to the letter from seven groups to District Attorney General Soares. Instead of disclosing each source, Mr. Hallman listed “various common stock” and “various corporate bonds.” His lack of disclosure should serve as a red flag and calls into question his impartiality on the state’s fracking decision.

Furthermore, records obtained via the FOIL request indicate that fracking companies have recently worked directly with Cuomo Administration officials.  XTO Energy Inc, a subsidiary of ExxonMobil, wrote to Mr. Schwartz and Mr. Hallman requesting changes to the state’s draft regulations on fracking in August 2012. And, The Williams Companies communicated with Mr. Hallman regarding natural gas pipelines twice in the summer of 2012.

New York state law states that public officials should avoid personal investments that could “create substantial conflict between his duty in the public interest and his private interest.” Both Mr. Schwartz and Mr. Hallman may have conflicts of interest that violate this standard.

Today during a press conference in Albany, Alex Beauchamp, Food & Water Watch Northeast Region Director, said, “We are outraged to discover that Governor Cuomo’s top aide is so heavily invested in oil and gas companies. And further, that he made these investments during the very timeframe this administration has been considering whether to allow fracking in New York. Clearly, this administration must not allow fracking to move forward under this cloud of scandal.”

Learn more at NYFrackingScandal.com.

The Five Rules for Natural Gas

Hal Harvey, founder of ClimateWorks, has a sharp piece on natural gas in today’s Los Angeles Times. Hal served  on the first President Bush’s Energy Task Force of the President’s Council on Environmental Quality, and later on the Energy Panel of President Clinton’s President’s Committee of Advisors on Science and Technology.

In this op-ed, Hal provides a thoughtful and critical look at making sure natural gas development is done right for our climate, our water, and our great outdoors.

Click to read it on the LA Times website.

Natural gas: Cheap, clean and risky

Natural gas has a key role in our energy future, but it must be handled with care.

By Hal Harvey

January 3, 2012

Political leaders from both parties argue that natural gas could save our economy, the environment and promote our national security. Is this so? Or is it just a dream?

It turns out that the way one develops natural gas will determine whether it is a serious help to our energy and climate problems, or a dangerous extension of bad habits.

On the face of it, natural gas looks terrific. The United States — and many other countries — have abundant domestic supplies. The cost, per delivered unit of energy, is about a third of that of oil. It is cheap and fast to build power plants fueled by natural gas. And when burned, it emits only half as much carbon as coal. So what’s not to like?

Well, things are not so simple. Under the best conditions, we may enjoy those benefits, but under more adverse conditions, gas can be a worse generator of greenhouse gas than coal, can wreak massive local environmental destruction and can undermine energy efficiency and renewable energy. And without a strong set of policies to guide natural gas development, the worst case is far more likely.

Start with climate change: Generating a kilowatt-hour’s worth of electricity with a natural gas turbine emits only about half as much CO2 as generating the same electricity at a coal plant. Half-off is pretty good. But unburned natural gas turns out to be a very powerful greenhouse gas: One molecule of leaked gas contributes as much to global warming as 25 molecules of burned gas. That means that if the system for the exploration, extraction, compression, piping and burning of natural gas leaks by even 2.5%, it is as bad as coal.

So, how much does the gas system leak? No one knows: Estimates range from 1.5% to as high as 8%. Even near the low end of that range, gas can be as bad as coal. And whatever the leaks in the U.S. system, it is likely to be far worse in, say, Russia.

This gives us Rule One for smart natural gas development: No leaks in the system. We have to know, for certain, that the whole process is tight, and stays that way.

There’s more we need to ensure, because of the economics of energy systems, and how that drives the choice of options in the electricity system. It starts with a basic economic truth: Once a coal-fired plant is built, it is incredibly cheap to run. Once built, our coal plants run forever. The median age of a coal plant in the United States is 44 years, and fully a third of them were built during or before the Eisenhower administration.

What this means is that when we add new natural gas power plants to the electricity system, it does not, through pure market forces displace coal. Instead, it displaces other new alternatives, which generally means new renewable energy. If half-CO2 gas is displacing zero-CO2 renewables, well, that’s hardly a victory. So, Rule Two: Use gas to shut down old coal. Make this an explicit condition.

The final three rules have to do with local environmental conditions. We have all seen the films of people’s tap water catching fire after a nearby gas well was put in. That’s because of lousy construction quality: Bad well casings allow gas to leak into the aquifer. They can also allow in fluids from hydraulic fracturing (fracking) when that method is used to tap a new gas well. Rule Three: Strong standards for wells, with effective monitoring and enforcement.

Then there is the damage that wells can do to the gas site. Many wells extract brackish water and other nasty byproducts, like benzene and toluene from deep underground, and spill the mixture onto nearby farmlands — literally salting the earth. The water is a large-scale byproduct of the gas extraction, and, at the request of then-Vice President Dick Cheney’s energy task force, it is exempted from any regulations under the Clean Water Act. Rule Four: Don’t allow these toxic streams to poison the land.

Finally, choosing where and how to drill is important. Many of the new natural gas technologies entail massive surface disturbance. Roads, drilling rigs, compressors, pipelines, drainage ponds and large amounts of heavy equipment are required for each well. And wells are densely placed, sometimes one for every 10 acres. This means that many natural gas fields are industrial wastelands. After drilling, cattle ranches in the West have been left unsuitable even for cows, never mind wildlife.

We need to zone the natural gas development so that it is kept out of ecologically important areas, and we need strong drilling, operating and reclamation standards so that gas doesn’t become a scorched-earth energy strategy.

Gas can do a great deal for our energy future. But if it is mishandled, it can instead serve up great problems — in land destruction, water quality and climate change. Five rules get it right: Don’t allow leaky systems; use gas to phase out coal; have sound well drilling and casing standards; don’t pollute the landscape with brackish water; and drill only where it is sensible. Let’s do this right.

Hal Harvey is the founder of the ClimateWorks Foundation. He has served on presidential commissions under the first President Bush and President Clinton, and he serves on an advisory board for the Department of Energy.

Hydraulic Fracturing undermining mortgages

Agreements to frack on private property could cause defaults and plummeting home prices.

By Andrew Schenkel

 

For the more than one million Americans who have been offered cash for the right to hydraulically fracture their property, an investigation by The New York Times outlines their biggest fears: devalued property and potential defaults.

Image: arimore/flickr

Ian Urbina’s investigation, which went to print on October 20th, points out that deals offered to landowners for drilling rights may be in direct conflict with the mortgage agreements between banks and citizens. According to Urbina’s report, “bankers are concerned because many leases allow drillers to operate in ways that violate rules in landowners’ mortgages.” Banks have traditionally stayed out of the deals made between the gas industry and landowners, which has caused countless families to be living in violation of the terms of their home mortgages without even knowing it. This, needless to say, could cause citizens to contractually default on their loans and for the bank to demand full payment

The recent investigation notes that the technical default situation has not yet occurred on a widespread level, but the fears that the gas industry could be on the cusp of causing another mortgage crisis has created an atmosphere where more red tape would be added to mortgage procedures. From the investigation: “In terms of litigation, there is a real potential for a domino effect here if lenders at each step of the way made guarantees that are invalid,” said Greg May, vice president of residential mortgage lending at Tompkins Trust Company, headquartered in Ithaca.

Another part of the investigation included a presentation given by the Pennsylvania Credit Union Association, which compared getting drilling procedures in line with mortgage regulations to “solving a Rubik’s Cube.” The presentation outlines the basic questions of how this can be done, while minimizing risk for local lenders.

In recent years, landowners in heavily ‘fracked’ parts of the county, like Garfield County Colorado, have seen property values plummet. Retirees, like Dee Hoffmeister and Lisa Bracken, have experienced this first hand. Both of their families have found themselves powerless to pursue any recourse at recovering the damage done to their personal assets.

 

 

 

Related Articles:

The Silent Treatment: Why those out west are watching the fracking reports from the east.

Info Graphic shows the BIG FIVE FRACKING THREATS

From earthquakes to poisoning drinking water this image spells out all the concerns

 An info graphic posted on CleanTechnica outlines the concerns that people around the world are raising about hydraulic fracturing. Hydraulic fracturing, or fracking – as it is commonly called, is an industrial process where poisonous chemicals are mixed with water and injected into the ground at high pressures to get to natural gas supplies. As the practice has become more common in Colorado, Wyoming and Pennsylvania it has been met with an outcry of concerns. This latest info graphic outlines the totality of the concerns. Below the Checks and Balances Project breaks down the info graphic and the five major threats fracking presents to both people and the planet. Read more of this post

ThinkProgress blogs on Tipton’s field hearing

The team over at ThinkProgress posted a well researched, thoughtful article on Rep. Tipton’s field hearing today to review drilling standards. It turns out there is evidence that drilling near groundwater supplies can have negative effects on people’s health.

Click to read the full story.

Public health voice absent from fracking study

Shutting out public health perspectives is becoming common place, this time its being done by the federal government

On Monday the Secretary of Energy Advisory Board’s (SEAB) Natural Gas Subcommittee issued several recommendations to, “improve environmental safety and performance from extracting natural gas from shale formations.”

Initial reaction to the report is mixed and that’s no accident considering the split membership of the subcommittee. The seven-member committee is made up of scientists, researchers and experts who have ties to both the fossil fuel industry and the environmental community. But absent from the committee’s membership was someone from the public health community. This exclusion has become commonplace as communities from coast to coast try to get to the bottom of hydrofracking.

Click here to see those on the subcommittee.

This latest omission was pointed out during public conference call shortly after the report was issued.

“I find it very interesting that this report contained absolutely no input from medical professionals. But on page eight of your report it outlines that public health is one of the four areas that you are trying to address,” said one of the first callers on Monday.

Between other prepared statements from callers on both the pro-fracking and anti-fracking sides another citizen pointed to the absence of a focus on public health.

“We are concerned and I am concerned, as a health care professional, about the health impacts of this practice. Why would you let a practice like this continue without knowing what the chemicals can do once they are placed underground,” said Ernie Hernandez of West Virginia.

It seems public health is where the line is drawn when it comes to studying fracking. Earlier this year, Garfield County, Colorado, wrestled with this very same issue after elected officials refused to recognize a health impact study that the county directed $250,000 of taxpayer money towards.  The three members of the Garfield County Commissioners, who are heavily funded by the gas industry, unanimously pulled the plug on the report. The report’s findings were believed to be damning to the industry. The second draft of the executive summary stated, “The principal findings of the HIA are that health of Battlement Mesa residents will most likely be affected by chemical exposures, accidents/emergencies resulting from industry operations, and stress-related community changes.”

This was hardly the first time a professional assessment of the public health concerns associated with hydrofracking had come back to reflect poorly on the gas industry. Just before the Garfield County health scandal, Dr. Sandra Steingraber, a biologist, well-known author and Scholar in Residence at Ithaca College, reported that chemicals used in hydrofracking could be an “enormous” risk that could cause complications with pregnancies.

“Do we want introduce into the environment more chemicals for which we have demonstrable evidence can harm pregnancies. They are reproductive toxins,” said Steingraber in an interview with the Checks and Balances Project in May.

Despite these well-documented findings and reports, the Secretary of Energy Advisory Board’s Natural Gas Subcommittee contained no voices from the public health community. This isn’t to say the board’s recommendations were entirely beneficial to the gas industry. The board’s call for the industry to disclose the toxic chemicals it injects into the ground was received well by those in the environmental community. On Monday’s call the chairman of the Natural Gas Subcommittee John Duetch said, “while our recommendations were all unanimous, I think each member of the committee would have done it very differently it were up to the individual.” Even if there were true, it’s hard to imagine public health getting more attention considering the lack of representation.

The Hanger Rule: How many times can one plug pro-industry talking points?

Isaac Newton taught us that for every action there is an equal or opposite reaction, and in John Hanger’s case that means answering in pro-industry talking points anytime something bad is said about the gas industry. We call it  ‘The Hanger Rule.’

Hanger is the former head of Pennsylvania’s Department of Environmental Protection and now works in Harrisburg as a lawyer with Eckert Seamans law firm as an advisor on energy and environmental issues. While he is mostly out of public life, Hanger emerges with blog posts within hours of almost any negative report about hydraulic fracturing that hits the mainstream media.

In February, Hanger responded to Ian Urbina’s piece in The New York Times that identified concerns about lax regulation of hydraulic fracturing in Pennsylvania with a series of posts to his blog, These concerns included such facts as: The Pennsylvania waste treatment facilities were ill- equipped to remove radioactive material from fracking wastewater before it was discharged into rivers and waterways throughout the Keystone State. This rapid reaction led Checks and Balances Project Director, Andrew Schenkel, to pay a visit to Hanger’s Harrisburg office to gain a better understanding of his perspective.

Hanger is a proud man who touts the numerous regulations he helped to impose on the gas industry while in office. It was perhaps natural that a man who dedicated so much of his life to improving regulations in Pennsylvania may be a bit defensive about allegations that his work was ineffective or simply did not go far enough. However, what was perhaps most striking was Hanger’s tone throughout the interview. He wasn’t combative. He wasn’t defensive. Instead, he maintained a friendly nature while talking in sound bites. Almost all of his answers mimicked the familiar rhetoric of the gas industry. In fact, Hanger touched upon almost 30 industry talking points.

As you can see in the video, Hanger uses key gas industry messaging, that gas is a cleaner alternative to oil and coal, 15 times.

Hanger’s comments are in line with the words of energy tycoons T. Boone Pickens and Aubrey McClendon of Chesapeake Energy.

-“Natural gas is about 30 percent cleaner than petroleum and produces no particulate emissions.” -Pickens

-“Natural gas has already achieved significant market share gains in the electrical generation market at the expense of coal largely on the basis of price, but also because of environmental issues.” –McClendon

Weeks after the first Urbina story, Hanger reemerged during the release of a new study that suggested that gas may not be a cleaner alternative to coal. The study, which was conducted by scientists at Cornell University, simply suggested that more research should be devoted to finding out if gas is as clean as many in the industry suggests. Following the release of that study, the gas industry embarked on a campaign to discredit the study’s authors including lead scientist Robert Howarth. A Google search of Howarth’s name generates a top search result as a link (paid for by the America’s Natural Gas Alliance [ANGA]), which casts doubt on his study. The link takes readers to quotes from John Hanger who says, “Professor Howarth does want the result to which he gets. He is a committed opponent of gas drilling and fracking, a position to which he is entitled in this free country.”

Following ANGA’s ad campaign, the Checks and Balances Project caught up with the Howarth. The scientist had no problem explaining that his conclusion, that more data is needed to find out if gas is on par with coal in terms of emissions, was not out of line. What was out of line, according to Howarth, was the lengths to which pro-gas advocates had gone to ruin his reputation. “It used to be that if you Googled my name… my boring lab site at Cornell University was the top pick up. Now there’s an ad from the gas industry, which has a critique of why my science is wrong. They are trying hard to push back,” said Howarth.

The latest news about gas broke in late June when Urbina filed another report for the Times that quotes an industry insider saying that rhetoric about the supply of gas is comparable to a “Ponzi scheme.” Since this story focused more on economic concerns rather than environmental ones it seemed unlikely Hanger would weigh in. But he did. “Would anyone imagine more sensationalistic narratives than radiation, Ponzi, and Enron?” asked Hanger. He continued, “Consistent with this reporter’s method, today’s article uses often anonymous statements to paint a sensational narrative and leaves out or underplays critical information that is inconvenient to establishing the credibility of the dominant anti-gas narrative.”

These comments led the Checks and Balances Project to go back and review its interview with Hanger from earlier this year. The point was to see if Hanger had weighed in on the economics of drilling for gas in Pennsylvania. It turns out Hanger did – using pro-industry talking points 13 times throughout the conversation.

Once again Hanger sounds a lot like McClendon, except with no soft background music as you can observe in this video.

-“CNG costs about 40& less than gasoline. Natural gas is abundant, American shale basins contain an ocean of natural gas”

During the initial interview, Hanger was asked if he was currently working for the gas industry or if Eckert Seamans was planning to assign Hanger any gas industry clients. At the time Hanger said he had no gas clients but added he wouldn’t rule out working for them. While the industry is not currently paying Hanger, what you hear in his interviews  certainly sounds like he is.